Are financial modeling skills tested in finance interviews? How?

I can't speak for every firm, but I recently interviewed for an internship at JPMorgan and they did test my financial modeling skills. They didn’t make me build a full model from scratch, but they wanted to see if I could walk through the basics. They asked me to talk through how a simple cash flow model works and explain what would happen if certain numbers changed, like revenue or expenses. Honestly, they didn’t expect perfection but wanted to see that I understood the fundamentals and could think logically about how the different pieces connect. Getting some practice beforehand helped a lot!

Based on my experience, financial modeling skills do come up, but not every interview tests them in-depth. Some companies just ask general questions about your experience with financial models or how comfortable you are with Excel. Occasionally, they’ll describe a hypothetical scenario and ask how you’d approach building a model for it, without needing to actually build it on the spot. Other times, they’ll ask you to explain the key steps you’d take in forecasting or valuing a company. So, it’s good to be prepared for both hands-on and more theoretical questions.

Good question--modeling is 100% critical. As an interviewer and interviewee for many investment banking and private equity firms, I've seen most candidates won't make it far without intensive modeling experience. These show up in a few ways:

1. Modeling Tests: These are 1-2 hour Excel challenges common in PE firms where you demonstrate your ability to build LBOs and 3-statement financial models.
2. Case Studies: 24-hour or multi-day case studies common in investing roles require a strong modeling component in addition to qualitative analysis.
3. Paper LBOs: Interviewers testing your math skills and financial knowledge may request a paper LBO in an interview.
4. General Technicals: Regardless, questions in technical interviews will benefit from modeling understanding. 

That said, learning all this is hard! Let's set up a free intro model and discuss how you can crush your modeling interviews.